6 Trade-Proof Sector ETFs To Follow If No Deal Is Cracked
Zacks Investment Research | Dec 10, 2019 08:00PM ET
Almost two long years, U.S.-China trade tensions have reached a tipping point as the deadline for the interim “phase one” deal is fast approaching. A host Jim Cramer highlighted some sectors in this regard, which have less exposure to the development in U.S.-China trade. Here are a few.
Telecom
Cramer’s top pick was telecom, particularly Verizon (NYSE:VZ) , AT&T (NYSE:T) and CenturyLink (NYSE:CTL) (NYSE:T) . These stocks mostly have domestic exposure and are likely to benefit from a dovish Fed. Investors should also note that these stocks generate solid yields and should prove to be great buys if there is no trade deal and the resultant decline in bond yields. Telecom fund iShares U.S. Telecommunications ETF IYZ should thus be in focus.
Health Insurers and Hospitals
This segment is almost totally domestic-focused. Companies likeUnitedHealth Group (NYSE:UNH) and HCA Healthcare Inc. (NYSE:HCA) have good exposure to iShares U.S. Healthcare Providers ETF IEHS .
Oil Refiners
Per the source, oil refining companies at Permian Basin have “no exposure to China” and thus these are tariff-proof. Moreover, still-low oil prices are good for refining companies as these use crude as their input. VanEck Vectors Oil Refiners ETF CRAK emerges as a good pick in this regard.
Cyber Security
“The cybersecurity stocks are HACK looks to win from this trend.
Homebuilders
According to the NAHB, the U.S.-China trade war has affected $10 billion worth of goods used in the homebuilding industry. While this will likely hurt the pace of homebuilding, the impact is probably not that severe.
U.S. homebuilding bounced back in October and permits for future home construction soared beyond XHB thus appears almost trade-resistant.
Utilities
U.S. utility companies have less to do with China. And these are also good bets amid an edgy operating backdrop. Utilities Select Sector SPDR Fund XLU draws attention in this regard.
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